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Gold producer Acacia Mining (>> Acacia Mining PLC) faces a "critical year" as it seeks to expand across Africa and further boost output, its CEO said on Tuesday, after reporting record production in 2016 and a near 150 percent rise in its dividend payout.

Gold producer Acacia Mining (>> Acacia Mining PLC) faces a "critical year" as it seeks to expand across Africa and further boost output, its CEO said on Tuesday, after reporting record production in 2016 and a near 150 percent rise in its dividend payout.

Shares in the London-listed miner, which is majority owned by Barrick Gold (>> Barrick Gold Corp.), were up 6.8 percent at 495.8 pence by 1133 GMT, when the FTSE 350 mining sector index <.FTNMX1770> was flat.

After a rough 2015, the entire mining industry recovered last year, driven by a rebound in commodity prices.

The price of gold has been lifted as investors seek shelter from further political shocks after Britain voted to leave the European Union and Donald Trump unexpectedly became U.S. president, although a stronger dollar has eroded some of the gains.

Acacia prides itself on having continued to invest when other miners focused almost exclusively on cutting costs and says it is seeing the results.

"2017 is going to be the critical year. We will start to see the fruits of our contrarian exploration strategy," Chief Executive Brad Gordon told Reuters.

In the current year, a six-month extension of mining is expected to lead to a 40 percent increase in output at Buzwagi, Tanzania, compared with last year's production, the company said in a statement.

Acacia also expects to make an announcement on its West Kenya mining project in the first quarter, which Gordon said would just be a first step in its expansion plans.

"The Kenyan project is probably the first cab off the rank. During the last three years, we have been putting our foot on some of the best ground in West Africa," he said. "We expect to see at least one (other) project emerging from West Africa over the next three years."

Tanzania is at the heart of Acacia's African venture and the company says it remains committed to the nation despite higher tax bills.

Some of Tanzania's biggest investors have said they could scale back their operations because of tougher tax demands.

CFO Andrew Wray said the best way was to confront the demands and the firm had pre-paid its tax.

"At the end of the day, they're a developing economy. The government has ambitions. We will see continued pressure," Wray said.

Apart from record production in 2016, Acacia cut all-in sustaining costs by 14 percent and more than doubled its net cash position.

It has proposed a full-year dividend of 10.4 cents for 2016, which is more than twice the total dividend for 2015 (4.2 cents).

Analysts said the results beat expectations.

"In the light of consistent production growth, cost improvements and dividend increases, the valuation relative to peers appears increasingly compelling," BMO Capital Markets said in a note. It rates Acacia's shares as an 'outperform'.